I cut the tether off. When I get to the pump, I remove the cap and chuck it into the nearest bush, patch of trees, or some sort of wet lands. I pump gas. Then I spend anywhere from 5 to 165 minutes retrieving the cap. I screw it back on and drive away. I'm not letting it dangle against the paint and I don't know any better way.

I may be missing the point here (entirely possible). But you have a GTI, then spent time, effort and money to strip it down to change everything to make it look like a R20? Urhh, why not just get the Golf R and have the looks that you want and the added benefit of it being an actual R20? To each there own I suppose. Have fun and kudos on the effort.